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Tag: housing market

  • Fannie survey says it’s a seller’s market

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Based on Fannie Mae’s Home Purchase Sentiment Index (HPSI), it looks like consumers think we’re in a seller’s market. (I’m sure that comes as a big surprise to you.) For only the second time in the history of the index, the net share of those saying it’s a good time to sell exceeded the net share saying it’s a good time to buy. This happened because of an 8-point decline in the good time to buy index to a record low and a 6-point rise in the good time to sell index, which reached a record high.

    I think the surprising result isn’t that we’re in a seller’s market but that it took so long for this reality to show up in the index. While the buy index is only slightly lower than it was last year and hasn’t varied a lot over the last 12 months, the sell index is 19 points higher than last year.

    Changes in other components of the index were less dramatic. The net share who thinks mortgage rates will rise fell by five points, but the vast majority of respondents still believes rates will rise. The net share who thinks home prices will rise also fell by five points. This result seems anomalous as recent home price data all point to increasing and sometimes rapidly increasing home prices.

    The survey also showed that consumers’ confidence in their personal financial situation continues to be strong with a net 71% not concerned about losing their jobs and a much larger share expecting household income to rise this year. The share who believes the economy is on the right track also ticked higher to 47%, which bests the wrong track share by seven points.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. Click here for a link to the survey results.

  • Fannie survey shows homebuyers optimistic

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Fannie Mae’s Home Purchase Sentiment Index recovered in Apr from its recent swoon to its second highest level in survey history. The index is 3 points higher than last Apr and is similar to the level reached during last year’s spring buying season.

    The most interesting results of the survey are the 5-point rise in the net share who thinks now is a good time to buy a home and the 5-point decline in the net share who think now is a good time to sell. I don’t generally put much stock in one month’s data, but the size of the change is a bit alarming and could suggest that home inventory problems will not end soon. However, averaging the data over several months shows that the net share saying “good time to buy” has remained somewhat constant while the net share saying “good time to sell” has been slowly rising. It will be interesting to see if the numbers reverse next month.

    One positive conclusion from the survey is that Americans continue to feel better about their financial situations. The net share who feel confident about their jobs jumped 7 points, and the net share reporting their income has increased significantly in the last year rose 2 points. With respect to the economy, the right track/wrong track indicator remains positive with a net 7% saying the economy is on the right track.

    I found two other data points interesting. The difference between the expected rise in rental prices and expected rise in home prices has narrowed this year. Last year, respondents predicted rents would rise by 4% while home prices would rise by only 2%. They now expect home prices to rise by 3%, which might create some sense of urgency to act before buying a home becomes unaffordable.

    Finally, the net share who think it’s easy to get a mortgage today continues to rise, suggesting consumers have less apprehension about the mortgage process.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. Click here for a link to the survey results.

    May 15, 2017

  • Fannie housing index shows renewed confidence

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Fannie Mae’s Home Purchase Sentiment Index reversed a 5-month slide in Jan, climbing two points. The index is 1.2 points higher than this time last year, which may bode well for spring home buying.

    The rise mirrors increases in other measures of consumer confidence, which recently hit post-recession highs. In the Fannie survey, I think the most interesting result was the five-point rise in the net share of consumers reporting significantly higher income in the last year. A higher percentage also expects their financial situation to improve in the coming year. Given the growing concern about home affordability, if consumers are feeling more flush, it may abate some of this concern.

    One dramatic result of the survey was the share who expects home prices to rise in the next year, which increased 7 points. This probably reflects growing concerns about home affordability, but interestingly, it runs counter to the recent hard data, which shows home prices moderating. If home prices continue to moderate, it might give you an opportunity to present prospective homebuyers with this contrarian news that would come as a welcome surprise.

    Finally, the share who said now is a good time to sell rose two points, while the share saying it’s a good time to buy fell three points. I suspect this, too, reflects concerns about affordability.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. Click here for the survey results.

  • Housing stronger than indicated by Fannie housing survey index

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Industry reporters focused on the negative in the latest Fannie Mae housing survey. The headline Home Purchase Sentiment Index (HPSI) dropped about 2% from Dec to a reading of 81.5. But if you analyze the survey data, I don’t think the results are as dire as the headlines would have us believe.

    The most significant negative I saw in the report is the year-long decline in the share of folks who think now is a good time to buy a home. I suspect that’s a reflection of the so-called affordability crisis. Whether a crisis actually exists, the media is beating it into people’s heads that housing is becoming unaffordable.

    On the flip side, the share of folks who think now is a good time to sell is trending higher. This could lead to more inventory hitting the market for the spring selling season.

    If concern about personal finances was the factor driving the decline in folks saying it’s a good time to buy, it’s not showing up in the survey results. The share that expects their personal financial situation to improve has been rising for the last 6m, and job security has remained steady within the survey’s margin of error during the same period. However, while folks don’t express concern about their personal situation, the right track-wrong track survey of the economy continues to grow increasingly negative.

    I noticed several other positive nuggets in the report:

    – A steadily increasing share of folks expects mortgage rates to increase in the next year. That may create a sense of urgency among potential homebuyers.

    – Respondents expect rental rates to rise almost twice as fast as home prices. Got any renters sitting on the fence?

    – And, finally, the respondents are becoming increasing positive about the ease of qualifying for a mortgage.

    Fannie’s housing survey reflects the attitudes of 1000 consumers about the housing market and the economy. Fannie has conducted the survey each month since June 2010. You’ll find a link to the survey results at the end of my blog.

    Click here for the survey results.

  • Freddie Mac housing index shows recovery continues

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Freddie Mac’s MiMi index, or Multi Indicator Market Index, continues to point to a recovering housing market. The latest index covers the spring buying season, and shows the nationwide index increased to 79.2. While this value still indicates a borderline weak housing market, it is a sizable improvement from last year and from the previous month. By comparison, the index high was 121.16 in 2006.

    More than half the states have MiMi values in the stable range of 80 to 120. Texas ranks 7th nationwide with a MiMi value of 87.6. This represents a 5% improvement over last year.

    Of Texas metros, Austin leads the pack and remains in the top 5 nationally with a value of 92.8. Values for other TX metros include DFW at 83.9, El Paso at 84.9, Houston at 86.7, The Valley at 89.1, and San Antonio at 86.5.

    The biggest drag on MiMi values for TX metros is the number of purchase applications. This probably is more indicative of tight supply than market weakness. Thus, I think it’s safe to say the housing markets may be stronger than indicated by their MiMi scores.

  • Cash sales down; Will 1st-time homebuyers return?

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    Although the information is a little dated, I found it interesting that Apr Realtor data confirmed what many of us felt this spring. The economy and housing market in particular seem to have shaken off the winter chill and point to a strengthening housing recovery. For the 3rd month in a row, more Realtors viewed the market as strong as opposed to weak across all property types.

    Two other interesting results were:

    – Homes continue to sell quickly, typically within 39 days; and

    – Investor sales are declining, mirrored by a decline in cash sales, which accounted for 24% of sales.

    Moving forward, this could be good news for first-time homebuyers as they tend to lose out to cash offers.

    Finally, Realtors identified several areas of concern, including:

    – Limited inventories of move-in ready, affordable homes – I think move-in ready is a key point here;

    – Financing issues, including a difficult, slow qualifying process, continued problems with appraisals, and concern about upcoming regulatory changes;

    – Slowing demand from international buyers because of a strong US dollar;

    – The adverse impact of lower oil prices and the effects of higher flood insurance rates; and

    – The potential impact of rising interest rates.

    If you want to see the full report, click on the link at the end of my blog.

    Click here to see the full report.

  • Healthiest housing market since 2001

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

    by G. Steven Bray

    I read an interesting report from Nationwide Insurance’s economics group this past week that claimed the housing market is the healthiest it’s been since 2001. Let’s take a look at how they came to this conclusion.

    The report’s authors calculate a value they call the Leading Index of Healthy Housing Markets (LIHHM) using employment, demographic, mortgage, and home price data for the national and individual housing markets. They claim a market’s score, which ranges from 75 to 125, indicates the relative health of that market. A score of 100 is neutral, and scores above 100 indicates a healthy market.

    The current value for the national market is 109.8, which the authors conclude indicates a housing market unlikely to enter another downturn soon. Further, they find that only two of 373 metro areas have negative scores at this time. Positive contributors to the index included employment gains and higher home prices. In addition, they cite a pick-up in household formation.

    Interestingly, these results are a bit at odds with Freddie Mac’s Multi-Indictor Market Index (MIMI). The national MIMI score in Jan was 74.6, a level Freddie says indicates a weak housing market.

    Regardless of which report you believe, what may be more interesting is the trend, and both indices show year-over-year improvement.

    Click here for the Nationwide Insurance report.

    Click here for the Freddie Mac report.

  • Housing survey shows you how to increase sales

    Click here for a link to the Fannie Mae survey results.

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.

  • New Freddie tool predicts housing market performance

    Click here for a link to the Freddie Mac Multi-Indicator Market Index tool.

    For more information, please contact me at (512) 261-1542 or steve@LoneStarLending.com.